Pacific Northwest Sporting Goods reported annual depreciation on a newly acquired asset for 2016 in the amount of $80,000 using the straight-line method. For tax purposes, the company used the following schedule of depreciation expense:
Year 1: $144,000
Year 2: $116,000
Year 3: $ 92,000
Year 4: $ 84,000
Year 5: $ 64,000
Year 6: $ 56,000
Year 7: $ 48,000
Year 8: $ 36,000
Annual income before depreciation expense for each year is steady at $440,000 and the income tax rate is 35%. Show the financial statement effects relating to taxes in years 3 to 5 assuming taxes are paid at the same time they are accrued using the following template:

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The Answer of Pacific Northwest Sporting Goods reported annual depreciation on a newly acquired asset for 2016 in the amount of $80,000 using the straight-line method. For tax purposes, the company used the following schedule of depreciation expense:
Year 1: $144,000
Year 2: $116,000
Year 3: $ 92,000
Year 4: $ 84,000
Year 5: $ 64,000
Year 6: $ 56,000
Year 7: $ 48,000
Year 8: $ 36,000
Annual income before depreciation expense for each year is steady at $440,000 and the income tax rate is 35%. Show the financial statement effects relating to taxes in years 3 to 5 assuming taxes are paid at the same time they are accrued using the following template:

Pacific Northwest Sporting Goods Reported Annual Depreciation on a Newly